NKE Analysis


Update 3/28/2017: NKE gappd downward after publishing earnings and then in ensuing days gradually retraced more than half of the loss. I exited at my target of 25% of maximum potential profit.

Since I entered the position, shares have seen a net loss of 3.2%, or a -165% annual rate. The options position produced a 33.2% yield on debit for a +1,730% annual rate.


NKE publishes earnings on Tuesday after the closing bell.

I shall use the APR series of options, which trades for the last time 31 days hence, on April 21.

Implied volatility stands at 28%, which is 2.3 times the VIX, a measure of the volatility of the S&P 500 index.

NKE’s IV stands in the 54th percentile of its annual range and the 59th percentile of its most recent broad movement.

The price used for analysis was $58.33.

Premium: $2.97 Expire OTM  
NKE – iron fly Strike Odds Delta
Long 62.50 62.5% 20
Break-even 60.97
Short 58.00 81.9% 54
Short 58.00 50.8% 46
Break-even 55.03
Long 52.50 88.3% 10

The premium is 60% of the width of the position’s wings.

The risk/reward ratio is 0.8:1.

Decision for My Account

I have entered a position on NKE as described above. The stock at the time of entry was priced at $58.30.

By Tim Bovee, Portland, Oregon, March 21, 2017

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